We are approving your State's continued use of your current alternative method to distribute Title I, Part A Basic, Concentration, and Targeted Grant funds to local educational agencies (LEAs) with fewer than 20,000 total residents. We originally approved this method in 1999.

The use of an alternative method is authorized in sections 1124(a)(2)(B), 1125A(a)(4), and 1125(d) of the Title I statute. At this time, however, it is not clear whether you may use this alternative method to distribute Title I Education Finance Incentive Grants (and you have not requested authorization to do so). We may regulate in order to permit States to apply this small LEA flexibility to the Education Finance Incentive Grants program. We hope to make a decision soon and will keep you informed.

This approval, as it applies to Basic, Concentration, and Targeted Grants, will remain in effect for the duration of the current Title I authorization. However, you must update those portions of the data that change every year in order to use the most current data. If you wish to change your alternative method for distributing Title I, Part A Basic, Concentration, and Targeted Grant funds at a later time, please resubmit a request for approval.

Under section 1124A(b) of the statute, North Dakota qualifies as a "small" State and may allocate Concentration Grants to LEAs in which the count of formula children exceeds the statewide average percentage or number of formula children. If you decide to use this flexibility provision, you must determine which LEAs qualify for Concentration Grants and make allocations using the alternative data approved above.

Page 2 -- Honorable Wayne G. Sanstead

Please note that any small LEA that is dissatisfied with the State's determination of its grant under your alternative method may appeal that determination to the Secretary. If you have any questions concerning our approval, please contact Joseph F. Johnson, Jr., Director, Compensatory Education Programs at (202) 160-0826.